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CIRCULAR No

CIRCULAR No. 1817/1999/TT-BKHCNMT OF OCTOBER 21, 1999 GUIDING THE CERTIFICATION OF PROJECTS ELIGIBLE FOR SPECIAL INVESTMENT ENCOURAGEMENT SPECIFIED IN ITEM 7, LIST I, APPENDIX I OF THE GOVERNMENT�S DECREE No. 10/1998/ND-CP OF JANUARY 23, 1998

(projects for environmental pollution treatment and environmental protection, and for waste treatment and processing)

Pursuant to the Government�s Decree No. 22-CP of May 22, 1993 on the tasks, powers and organizational apparatus of the Ministry of Science, Technology and Environment;

Pursuant to the Government�s Decree No. 10/1998/ND-CP of January 23, 1998 on a number of measures to encourage and guarantee foreign direct investment activities in Vietnam (hereinafter referred to as Decree No. 10/1998);

The Ministry of Science, Technology and Environment hereby provides the following guidance on the certification of projects for environmental pollution treatment and environmental protection, and for waste treatment and processing as projects eligible for special investment encouragement specified in List I, Item 7, Appendix I of Decree No. 10/1998:

I. GENERAL PROVISIONS

1. Subjects of regulation and scope of application

1.1. This Circular shall apply to projects of enterprises operating under the November 12, 1996 Law on Foreign Investment in Vietnam and conducting production and/or business activities in one of the following fields:

a/ Environmental pollution treatment and environmental protection

b/ Waste treatment and processing

1.2. This Circular shall not apply to projects of production and business enterprises, which have facilities for treatment of wastes discharged from, and environmental pollution caused by, their own production processes in order to ensure the environmental standards prescribed by law.

2. Interpretation of terms

2.1. "Environmental pollution treatment" means activities of human beings to reduce the extent of environmental pollution and meet the environmental standards.

2.2. "Waste treatment and processing" means the application of technologies and technical solutions to turn wastes into useful products and/or reduce environmental pollution.

2.3. "Environmental pollution" means a change in the environmental characteristics in the adverse direction, violating the environmental standards.

2.4. "Environmental protection" means activities to keep the environment healthy and clean, improve the environment, ensure the ecological balance, prevent and overcome adverse consequences caused by human beings and nature to the environment, rationally and economically exploit and use natural resources.

2.5. "Wastes" are substances discharged from daily life, from the production processes or other activities in Vietnam. Wastes may be in solid, gaseous, liquid or other forms.

3. Preferential regime

Enterprises executing projects, which meet the conditions prescribed in this Circular and are those where investment is specially encouraged, shall be entitled to privileges provided for in the Government�s Decree No. 12/CP of February 18, 1997 detailing the implementation of the Law on Foreign Investment in Vietnam and Decree No. 10/1998/ND-CP of January 23, 1998 on a number of measures to encourage and guarantee foreign direct investment activities in Vietnam.

II. CONDITIONS FOR BEING CERTIFIED AS PROJECTS ELIGIBLE FOR SPECIAL INVESTMENT ENCOURAGEMENT

To be eligible for special investment encouragement under Item 7, List I, Appendix I of Decree No. 10/1998/ND-CP of January 23, 1998, projects must concurrently meet the following conditions:

1. The projects must be entitled to the independent cost-accounting, with 70% or more of their total turnover being generated from production and/or business activities of environmental pollution treatment and environmental protection or waste treatment and processing.

2. The projects� fields of production and/or business activities must conform to the production and business fields specified in Appendix 1 of this Circular. For waste treatment and processing projects, they must use a volume of wastes accounting for 50% or more of their raw materials.

3. The projects must comply with the provisions of Vietnamese legislation on environmental protection.

III. ORGANIZATION OF IMPLEMENTATION

1. Dossiers of application for special encouragement of investment

a/ For new projects:

Dossiers of projects applying for special investment encouragement are at the same time dossiers of application for the granting of investment license. The project owners must, however, clearly describe in their economic-technical explanations (or the feasibility study reports) the technological processes of environmental pollution treatment or waste treatment and processing, the proportion of turnover generated from production and/or business activities of environmental pollution treatment and environmental protection or waste treatment and processing, the compatibility of the project�s production and/or business fields with Appendix 1 of this Circular. For waste treatment and processing projects, the percentage of wastes to be used as raw materials in the treatment and processing process must be clearly stated. The project owners must clearly state in their applications for the granting of investment license: Application for special investment encouragement.

The dossiers of projects applying for special investment encouragement shall be sent to the investment license-granting agency (mentioned in Section 2, Part III of this Circular). This agency shall have to act as coordinator in sending such dossiers to the concerned agencies involved in the process of evaluation and consideration of projects eligible for special investment encouragement.

b/ For on-going projects that have not yet applied for special investment encouragement or production and business expansion projects applying for special investment encouragement, their dossiers of application for special investment encouragement shall include:

- An application for special investment encouragement;

- The economic-technical explanation (or the feasibility study report) with the contents mentioned in Item a above.

- A valid copy of the investment license.

For on-going projects, their dossiers of application for special investment encouragement shall be sent to the investment license-granting agency and the Science, Technology and Environment agency (as mentioned in Section 2, Part III of this Circular) for consideration of special investment encouragement.

2. Competence to consider and decide projects eligible for special investment encouragement

2.1. The assignment of the competence to decide the granting of investment licenses is prescribed in Decree No. 12/CP of March 18, 1997 detailing the implementation of the Law on Foreign Investment in Vietnam.

For new projects, the consideration and certification of projects eligible for special investment encouragement shall be carried out simultaneously with the consideration of the granting of investment licenses.

For on-going projects that have not yet applied for special encouragement of investment or production and/or business expansion projects applying for special investment encouragement, such consideration shall be effected like in case of application for adjustment of investment licenses.

2.2. For projects licensed by the Ministry of Planning and Investment: On the basis of the conditions specified in this Circular and the evaluation opinions of the Ministry of Science, Technology and Environment, the Ministry of Planning and Environment shall decide the level of special investment encouragement in the investment licenses.

2.3. For investment projects licensed by various agencies according to assignment of responsibility: On the basis of the conditions specified in Part II of this Circular and the evaluation opinions of the provincial/municipal Science, Technology and Environment Services, the local agency assigned with the competence to grant investment licenses (or the Boards for Management of Industrial Parks, Export Processing Zones and High-Tech Parks) shall decide the level of special investment encouragement in the investment licenses.

2.4. The science, technology and environment managing agency shall reply to the investment license-granting agency within 30 days in cases where projects are eligible for special investment encouragement.

2.5. If projects are ineligible for special investment encouragement, within 20 days after the date of receipt of the valid dossiers, the managing Science, Technology and Environment agency (mentioned in Items 2.2 and 2.3 above) shall reply the investment license-granting agency in writing, clearly stating the reason(s) therefor.

2.6. If, in the course of operation, an enterprise no longer meets the criteria specified in Part II of this Circular, it shall be suspended from enjoying investment privileges.

2.7. The project owners (or the enterprises owning the project) shall be entitled to lodge complaints with the competent level if they are not allowed to enjoy investment privileges as prescribed by law.

IV. IMPLEMENTATION PROVISIONS

This Circular takes effect 15 days after its signing.

If any problem arises in the process of implementation of the Circular, agencies are requested to report it to the Ministry of Science, Technology and Environment for study and settlement.

Minister of Science, Technology and Environment
CHU TUAN NHA

Appendix 1

PRODUCTION AND BUSINESS FIELDS OF PROJECTS WHERE INVESTMENT IS SPECIALLY ENCOURAGED ON ITEM 7, LIST I, APPENDIX I OF DECREE No.10/1998

1. Pollution treatment projects

1.1. Projects for cleaning seriously polluted water areas, lakes, rivers, canals and ditches prone to environmental degradation or incidents.

1.2. Projects for cleaning seriously polluted land areas prone to environmental degradation or incidents.

1.3. Projects for treatment and control of air and/or noise pollution.

1.4. Projects for treatment of hospital waste water.

2. Waste treatment projects

2.1. Projects for collection and treatment of solid wastes from urban centers and industrial parks.

2.2. Projects for treatment of waste water from industrial parks, export processing zones and urban centers.

2.3. Projects for treatment and destruction of hazardous wastes and medical wastes.

2.4. Projects on the use of wastes as fuel for the production process.

2.5. Projects for treatment of industrial wastes.

3. Projects for recycling and processing of wastes into useful products

3.1. Projects for recycling of wastes which are assorted kinds of packing products made of paper, plastic, wood, metal,�

3.2. Projects for processing of wastes into fertilizers.

3.3. Projects for processing various kinds of industrial wastes, agricultural and daily life wastes into useful products.

3.4. Projects for restoration of faulty products into products that meet the initial quality criteria.

4. Projects for production of products used in the field of environmental protection. Projects for production of oil-absorbent substances or sheets and fibers.-